Helping Clients Live Intentionally And Generously With Charitable Giving Events (That Also Drive Growth): #FASuccess Ep 461 With Zac Larson

Podcast Player:

Resources Featured In This Episode:

• Zac Larson: Website | LinkedIn
• "Retire Intentionally: Stories and Strategies To Spend, Give, and Live With Confidence" by Zachary Larson
• Retire Intentionally Checklists and Exercises
• IntentGen: Our Impact & Scale (YouTube)
• AdvicePay
• Holistiplan
• 2024 Schwab RIA Compensation Report
• "Natural Born Heroes: Mastering the Lost Secrets of Strength and Endurance" by Christopher McDougall
• Strategic Coach
• EOS Worldwide
• "The Millionaire Next Door: The Surprising Secrets of America's Wealthy" by Thomas Stanley

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Full Transcript:

Michael: Welcome, Zac Larson, to the "Financial Advisor Success" Podcast.

Zac: Michael, I'm thrilled to be here.

Michael: I'm excited to have you on today and to get to talk about...because I think as we kick off, incorporating more charitable giving into the client experience. Most of us in the advisory world, we do some level of charitable as part of the financial planning process. It's guiding clients to use appreciated investments to fulfill their charitable giving, or it's a donor-advised fund, clump the charitable contributions together to get over the standard deduction and maximize the deduction. Maybe it's high-net-worth clients and we're creating charitable remainder trusts, or a private foundation, or doing some planned giving commitment from their future estates to their alma mater or place of worship or whatever it is. In the end, most of these are still ultimately about some version of optimizing and maximizing the income and estate tax benefits that come with charitable giving under the Internal Revenue Code, more so than literally making the giving part of the offering itself. I know your firm really has taken this to another level where it's not just charitable as part of the planning process, it's charitable giving as part of the experience of being a client with the firm. And so, I'm excited to get talk about what happens, what changes when the firm gets more proactive in charitable giving as a key part of, really, how you're engaging with clients and what you've experienced over the years by doing this.

Zac: Yeah. Because, like you described, we get technical too many times as advisors, and we want to drill down on all these efficiencies, which, they're clearly important. Generosity is about a lifestyle, it's about a joy, it's about impact, and that's what clients get excited about. And so, we've tapped into that and there's been some really cool things that have come about from it.

What IntentGen Financial Partners Looks Like Today [05:03]

Michael: So, I want to delve more into that in just a moment here. I think to start, just to give us some context on the advisory firm overall, can you tell us a little bit about the business itself so we understand from which all of this is happening?

Zac: For sure. I can't really decouple them though, because the name of our company, IntentGen Financial Partners, comes from two words that our clients used over and over to describe us when we named ourselves eight years ago. And those two words were "intentional" and "generous." And we said, "Okay. Well, if that's how people perceive us, we want to find more clients that are like that." And my partner and I formed a new entity. We're part of a spinoff from a large broker-dealer insurance company, and IntentGen Financial Partners came about with a mission of empowering people to live intentionally. And as we've grown, I want to share the numbers and the statistics that everybody does when they come on your show because I think that sets the bar. But I'm going to detour just a slight bit to something that we've found for us to be very motivating and really fun to share externally as well as internally. Because I'm guessing a lot of people listening have experienced this. A client will say, "Well, how's business?" And if we come at them with like, "Oh, we grew our AUM by whatever", or, "Our revenue increased." Any client is probably sitting there thinking, "Well, yeah, that's my money and those are my fees."

Michael: Very true.

Zac: So, we have to measure them as business owners, but what we want to focus on, we call it engaged partnerships. An engaged partnership to us is a client or a couple who says, "We want to partner with IntentGen to explore the purpose of our money, to be efficient with it, to maximize it, and to talk about, not just net worth, but net income and net impact." And when they're engaged in that planning process, then it becomes much more than just about the AUM and just more than the planning fee and more than the value of their plan. So, we have focused on that as a firm, and we know that if we deliver great value to people in that partnership, they'll keep paying us the planning fee that goes with that. We know that if we do a great job on their investments that they've entrusted to us, then they'll continue to pay us an advisory fee on it. We've been fortunate to see that model work. And so, we celebrate as a team when we grow our engaged partnerships. And that's how we do an annual celebration trip based on progress, and we can talk more about that later. That's the backstory. And so, today, we have 895 engaged partnerships. And that is composed of 325 households that pay us an ongoing financial planning fee and 570 who have an AUM relationship with us.

Michael: I'm intrigued. I'm processing a lot of different things here. So, engaged partnerships for you, it sounds like, is a very intentional, no pun intended, because you said that was your founding principles, a very intentional way to describe the people you work with to not say the word clients.

Zac: Correct. They're partners.

Michael: We're trying to create a different frame of mind around this. I'm assuming this is external language in addition to internal language. You tell, I was going to say clients, clients who are not clients. You tell engaged partners they're becoming engaged partners with the firm as opposed to saying they're becoming clients of the firm?

Zac: We do. We try to use that language as much as possible, and we celebrate it. So, we do each year a public measurement of how we're doing, where we do share some things like AUM, but we talk about the number of engaged partnerships and we measure the impact. So, we look at the usage of people's money, how are they taking it out to do things? How are they taking it out to give places? And so, we celebrate the purpose of the money, not just the accumulation of it. And yet, amazingly, it keeps accumulating too. So, we're up to about $555 million of AUM and about $800 million that clients have entrusted to us. See, that language is hard to break. I just said it. But the people have entrusted to us in total.

Michael: Okay. So, effectively, like $550 [million] in our good old-fashioned regulatory AUM that we get to report, but $800 million of broader assets under advisement of households that you're working with?

Zac: Correct.

Michael: And so, can I ask where the business is from a size of team, revenue of the practice?

Zac: Yeah. We're 16-people strong, and we have focused really hard on building a culture of what we refer to and try to get recognized for as being the best places to work. And there's a whole bunch of things that go into that in terms of compensation, and affirmation, and recognition, and promotion, and a lot of things that we can talk about. But that team of 16 all aligns with our core values. It's something integral to how we hire, how we promote, how we've even had to fire people is alignment with those values. So, 16 people. We'll do revenue this year of about $6.2 million. And one of the things that I love about that mix is it's diversified streams of revenue. Probably six, seven years ago, I was doing some speaking within advisory groups around the country. And at the time, we were at about $2.5 million, and our financial planning fee revenue was less than 1% of that $2.5 million, so it was like $20 grand or $25,000. And what I said to the groups is, "We're going to build a system and we're going to start creating this partnership model, and we're going to double our revenue, and the fee revenue will be 10% of it, so $500,000 out of the $5 million." And I'm proud to say we failed because we're only at like 8% of the overall revenue from financial planning, but we made progress.

Michael: It's close. You get partial credit for that. So, why? Why was that so important as a strategic goal for you?

Zac: Because as an advisor, I started out in 2000, and I watched the market deteriorate for the first two and a half years of my career. And I heard advisors talk about revenue being down. And then, it was a great time to be a new advisor. Attracted a lot of new people who were discouraged, helped them grow. And then we watched it all far fall apart from '07 to '09. And I saw advisors having to make tough decisions and lay off people and change businesses because all their revenue was market dependent. And I just look at any good business that's out there, and they don't have one single revenue stream that's dependent on an external force. They have diversified revenue streams. And so, we have our engaged partnerships, financial planning revenue, we have AUM revenue, and then we have a third bucket, we call it solutions revenue, which are just the pieces of the puzzle that people need to put in place sometimes: insurance, annuities, disability insurance, long-term care, whatever the pieces are.

Michael: And how much of the revenue pie is that solutions bucket for you at this point?

Zac: About 15%. Roughly 75 [percent] through AUM, roughly ten [percent] through financial planning, and roughly 15 [percent] from the solutions.

IntentGen's Fee Structure And Service Models [13:07]

Michael: So, on the planning side, how does that fee structure work for you? Are you planning fees in addition to AUM fees, or planning fees for certain clients who can't do asset management? Where does that several hundred thousand dollars of planning revenue actually come from in the business model or the pricing model?

Zac: It comes from a perspective that we have as a firm that said, "We want to be the type of company that can meet people where they are on their journey." So, a little bit of my backstory. I come from a family of two hardworking, very generous parents. We can maybe talk a little bit more about that later on. They're both pastors, never a lot of money. They never received great financial advice from external people. We want to be a firm that can help hardworking people that maybe don't have a certain minimum, and say, "We'll give you a great partnership, great advice, a great process, and you'll pay an ongoing fee." So, we have a fee structure, we call it our intentional partnership, that starts at $1,500. And we'll help you get going on a plan. And then we get to an innovative level and a visionary level that go up from there.

And so, we have a way that clients can engage with our firm and just do planning. And we bring on new clients that sometimes want to be DIY investors and have all their money at Vanguard or Schwab and do it on their own, but they still want advice on how it all fits together and creating a retirement distribution strategy or tax efficiency. So, people engage just in one role, sometimes, and they're an engaged partner.

Michael: And so, that would be a single, just standalone, "We're going to take you through the planning process, you'll get a financial plan deliverable at the end. It's $1,500."

Zac: Not quite.

Michael: Or is there an ongoing component?

Zac: Ninety-eight percent of ours are ongoing. And the only reason there's 2% is because life changed dramatically for them. So, we're not interested in one-time plans, we're interested in a partnership that says, "Let's help you be intentional with your money, generous with it, impactful year over year over year."

Michael: Okay. Just because you mentioned earlier, they might be do-it-yourselfers, at least on the investment end. So, this still isn't a, "I'll do the plan if you're doing your investment stuff." I'll give you a one-time plan, then you're going and implementing on your own. You still want ongoing partnerships, but just you've got a model if they don't want to do the investment part.

Zac: Correct. Yeah. So, "thoughtful" and "accountable," those are the two words that we share with clients over and over that they will get from us with their money, is, we'll help them be thoughtful about it and we'll help them stay accountable to what they want to get done. So, we've got a great system to follow up with what they want to get done. And if they implement and execute on their own, they'll save some money. And some people want to do that and others want us to do it for them.

So, we can fill the solution of some term insurance or a Roth IRA or a rollover IRA if they want us to do that. And if they want to do it on their own, then great. So, if they're doing it with us, then we discount our AUM fees and everybody's at a percent as the highest when they have an engaged partnership, and it goes down from there. If they're just doing standalone AUM, some people don't need a plan or want it, they just want us to advise and manage the investments, then the fee structure would start at one and a half [percent] and come down from there. And then as AUM grows, sorry, the last thing on this, if they're over a million, we discount the planning fee to the minimum level, $1,500, regardless of what we're doing. If they're over $2 million of AUM, then there's no separate planning fee.

Michael: Okay. So, a couple of questions here. I guess just mechanically, do you bill them $1,500 a year? Are you a quarterly? Are you a monthly? What do you find works for the clients that you're serving at this level?

Zac: Well, there's a great service for that that we found, this tool called AdvicePay.

Michael: Very cool. I've heard of that.

Zac: I'm guessing you might have. A great tool for anyone who's looking at automating some of that billing. But AdvicePay allows us to give the clients a choice and say, "Do you want to make an annual payment? Do you want to have a monthly subscription fee?" So, we tell people it's an annual planning partnership fee, and if they want to break it up and pay monthly, they can do that. We're very clear to tell them, "That doesn't mean we're going to talk to you monthly. It doesn't mean that every month, there's something coming from us or you're coming to us," but we'll be proactive several times throughout the year with specific things, and we'll be reactive when they need it.

Michael: Okay. I liked how you framed that. It is an annual planning fee. "We're simply giving you the option to choose to pay monthly."

Zac: Correct.

Michael: "You're not invoking a monthly service model from us in exchange for this."

Zac: Correct. Which we learned that the hard way, by the way.

Michael: Because you just started doing it and they started calling and saying, "Where's my monthly service?"

Zac: Yeah. And they're like, "We haven't talked to you in four months and this keeps billing." A lot of it just is improving our communication to explain that on the front end, and we haven't had any issues with it in a few years.

Michael: So then, what are the other tiers? Because you said if they're at higher asset levels, they come down to this minimum $1,500. So, I'm inferring then there are other higher tiers. What are they? How do they work?

Zac: The innovative level is geared more towards people who are in the accumulation to distribution transition. That's the language we use for when someone's ready to retire. So, they've been saving it up, they got to figure out a spending or a usage plan. And now we're getting into tax projections with Holistiplan, we're getting into cashflow modeling, so more creative generosity things. And that's a $2,400 level. And then there's sometimes where people have more complex situations, whether it's small businesses, real estate holdings. They want us to provide them with complete asset allocation details so they can execute on their own. So there's a $3,600 and above level that there's some clients who need that level of service.

Michael: Okay. That's interesting. The highest planning fee comes from the people you're giving the asset allocation to self-implement.

Zac: Correct.

Michael: Okay. Help me understand, I guess, the service model that's wrapped around these. You articulate there's some difference in focus, the middle tier. It sounds like it's a little bit more the pre-retiree, retiree-oriented, distribution planning, cashflow modeling, tax planning. The first tier is for those maybe a little bit younger, not accumulated assets yet, and visionary, last tier gets more complex. If this is an ongoing annual fee, what do you do for them through the year to earn the fee and retain the clients?

Zac: First part of the year is probability. So, we use MoneyGuidePro. I know there's a lot of great planning tools, that's just the one that we're familiar with and has been part of our system for a while. And we run money Monte Carlo simulations around their goals, and then use that to inform very focused decisions on, are we going to spend more this year? Are we going to save more this year? Are we going to give more? And try to really increase people's confidence to do one of those three things on purpose rather than accidental. So, first half of the year is about probability, purpose, and then asset allocation. Are we tweaking more aggressive or more conservative? Second half of the year is all about strategies and maximizing money. So, we do a lot of tax projections in the second half of the year to look at Roth conversions, getting money out within brackets, being mindful of Medicare limits, all the technical things that we like to nerd out on, but most people don't care about, they just need to know it's done.

Michael: So, it sounds like that's effectively a service calendar structure, like, we've got update projections, and make sure we're on track, and, "Where is our money going in the first half of the year?" Tax planning, optimization, all that good stuff of, I think you said strategies to maximize the money in the second half of the year?

Zac: Correct.

Michael: So, does that then differ by the tier or do you cover those core domains…

Zac: Oh, I wish you could interview our COO about that, she would have a field day on that question, because we internally have continual conversations about how we're over-delivering probably to most people. So, that is one of our weak spots is, I think we tend to overdeliver regardless of the level and not really differentiate. It's something we need to improve on. .

Michael: So, the old challenge, as so many of us have when we normally try to segment clients into higher price tiers and lower price tiers, and at the end of the day, no advisor actually wants to do less than their best for every client they're sitting across from.

Zac: You got it. And it's like, "I know you need this, Michael. I don't really want to bill you an extra $1,500 because although I know the value you're going to get from it, we're going to do it in 15 minutes together, and I'm just going to do it."

Michael: So, are these ultimately two-meeting-a-year cycles then that you have to go through everyone to do the projections in the first part of the year and the optimizations in the second part?

Zac: Yeah. One of our biggest learnings over time as we've segmented clients, and it's been an ongoing evolution for 15 years, I think advisors, we tend to attach value towards a meeting, but clients don't think of it that way. Some of our wealthiest, highest dollar clients, they don't want to sit down with me five times a year, even though I would've put them in the service model like, "You get five meetings and six contacts from Zac." They're like, "I don't care. Is my money okay? Am I on track? Are you thinking about things I'm not? Good. Check the box. Call me if I need something."

Michael: It turns out they were actually willing to delegate to you.

Zac: Right.

Michael: They don't want to keep meeting, like, "I pay you to worry about this. Do we have to meet?"

Zac: We've tried to shift it towards, if you're in a lower tier, the intentional level, we're going to have a proactive conversation one to two times a year. And maybe it's a meeting, maybe it's a call, maybe it's a Zoom. If you're in the higher levels and you have more AUM with us, then we're going to have two to three proactive meetings a year. But we're ultra responsive reactively when things come up.

Michael: Okay. And I guess beyond that, there's some distinction in simply, your middle tier folks tend to be close to retirement, so you're like doing more Holistiplan analyses than maybe the clients in the first tier that just don't necessarily have the situations that allow for the complexity of doing creative tax planning?

Zac: Right. If you're in your earning years, you want to have a higher tax bracket because it means you're making more money. There's not a lot you can do. When you're in your distribution years, you can flex that all you want. There's a lot more complexity to it from our perspective.

Helping Clients Be Thoughtful And Accountable With Their Money [25:04]

Michael: You also said earlier that part of this is you have, I think you said like, "We help clients to be thoughtful and accountable," and you have a system to help them be accountable and do the things they're supposed to do. So, can you share more of what that is? What do you do? What's the system? What's the process?

Zac: One of, I think, our best things that we've done over time is, early on, so this goes back to probably 20 years ago almost when, Corey, my business partner and I had formed our partnership. We had one staff person who was doing all the traditional things. And we knew we needed more people to surround us and compliment what we were doing. Everybody at the time was out hiring investment managers. They wanted CFAs to run their book. People were creating model portfolios, all this stuff. And we said, "We know that's important, but we want to focus on relationships." So, we hired a relationship coordinator. And that person's sole responsibility was to engage clients, keep in contact with them, keep them on our calendars, make them feel special. And that person, her name is Candy. Her role's evolved, but I call her out because she's been with us 20-plus years, and she's retiring next month.

Michael: Happy retirement, Candy.

Zac: She, and the role that she's filled, or roles she's filled through the years have been instrumental in helping us get here. But that evolved then over time. And we needed not just relationship coordination, but we needed coordination of plans. So, we needed people to call in to help with rollovers, to follow up on insurance illustrations with other companies, people to do the planning software. And for us, it was more than a back office paraplanner, it was an extension of us. So, it was someone who could build trust with clients, build a relationship, and field the first level of questions, and then consult with the advisor. And so, it's similar to models you talk about. We have pods. We call it a planning coordinator. And that's how we keep people accountable, is they're helping us take notes or we'll dictate notes through our software. They get tasks and then they know exactly what they need to follow up on and when.

Michael: So, then is that the whole pod, an advisor with a coordinator or are there more more people in a pod unit.

Zac: And a service coordinator. So, a planning coordinator is going to be an extension of advice, and a service coordinator is an extension of the stuff that needs to get done, whether it's applications, money, movement, beneficiary changes. So, each client who's in an engaged partnership has a lead advisor, a planning coordinator, and a service coordinator.

Michael: Okay. So, nominally, it sounds like your service coordinator is kind of the administrative tasks that have to get done for the client, and the planning coordinator is sort of a paraplanner, associate advisor kind of role.

Zac: You're correct. Yep.

Michael: Would they typically be like CFP professionals are working towards, or not necessarily?

Zac: I would say working towards that. So, we've brought in some who were fresh out of college with finance degrees. We brought in some who had some industry experience. But what we wanted to create is a pathway or an advancement track that says, "The ultimate destination in our company is not to be an advisor. That doesn't have to be the pinnacle. You could be an exceptional planning coordinator or a manager of a planning department or a director of operations or a COO. It's equally as important for us on the support and leadership side as it is on the advisor." And so, we've had planning coordinators over the last five years go both directions to say, "I want to become a senior planning coordinator. I want to manage more relationships and do more complexity." And then we've had others branch towards the advisor side and say that, "I want to be a lead advisor."

Michael: So, does that mean the lead advisor on a pod has some rotation of their planning coordinators over time because some of them move on to other things after some period of years on the team?

Zac: Correct. Yep.

Michael: Okay. Does that create problems or everybody's fine with that? I feel like someone's going to be really used to their really good planning coordinator and not necessarily be thrilled about that.

Zac: Yeah. It does create problems. I think there's no perfect solution.

Michael: I don't really know what the alternative is. You can't hold them down for life. That probably won't work out either, they'll just leave.

Zac: I heard once from a person who I value their opinion and perspective a lot. With another firm, they'd been swapped to another advisor, and they said, at first, they were kind of mad about it and then they realized that they were getting more from the new person they were swapped to, and they're like, "This is totally fine." And so, that's been the model we've tried to create is that any transitions, we need to create an experience where the clients are feeling they're getting more rather than less.

Michael: So, how do we do that in practice? What are you doing? What are you finding to try to make that the outcome?

Zac: Personal contact is one, like, pick up a phone and talk to somebody rather than an email. Goes a long way. Second thing is creating personal touches. So, read through the notes, understand who this person is, not just the accounts that they have, and be able to comment on their grandchild who's now in college, or their child who's playing sports in school, or whatever. Learn the person and be able to have personal connections. And then the third is very basic, but do what you say you're going to do. Get back to people right away and deliver a good response.

Michael: So, how many of these pods are there across the firm? You said there are like 16 people in total?

Zac: Yeah. So, that's in evolution too. Right now, we have five advisors on the team, but one of them is coming up the ranks. So, he is the lead advisor, but he only has a few relationships that are fully his. There would be four pods, so four advisors that each have a planning coordinator. And then there's one service coordinator right now. We've had some attrition, but we've actually decided to outsource the secondary service coordinator work. There's a firm out there that we're going to try to do that with. So, the main senior service coordinator, Kate, will be able to have direct contact with people when needed, but outsource things behind the scenes to a team that can do it.

Michael: Interesting. So, I guess functionally, every lead advisor has a dedicated, specific to them and their clients planning coordinator. But the service coordinator role is more shared.

Zac: That is correct.

Michael: Is one to many. Why outsourcing versus hiring another one if you've had some people changes?

Zac: It's a hard role. There's the ebb and flow. The volume of work goes from super stressful with lots of deadlines sometimes to nothing. We've just had a hard time finding people who can deal with the stress of that. The woman we have doing it now is incredible at it, but we've just struggled with some others. And so, we said, "We've got to try a different model."

Michael: Interesting. So, can I ask who you're looking to hire or how you found a outsourcing solution to handle this? What was the path?

Zac: Yeah. We have a COO. Well, Ashley is our director of client engagement, has been for the last five years. She'll be promoted by the time this podcast goes live. She'll be in the COO role, which includes a lot of, I think, cool things for her and for our company going forward with the change. But we just said to Ashley, "Help us find some solutions," which is one of our core values. "Explore this with optimism rather than uncertainty." We can find a good option here rather than going back to the drawing board of another hiring process. And so, Ashley interviewed some companies that do this. I'm going to mess up the name of the company, so I'm not even going to say it here, but they specialize in outsourced financial planning, preparation, and service work.

Ensuring Team Members And External Partners Are Aligned With The Firm's Core Values [34:10]

Michael: Okay. How did you pick? Were there defining criteria or things that stood out for you in trying to decide which of the providers out there to work with on this?

Zac: Yeah. I think any hire we make, not think, I know, any hire we make needs to have core values alignment, whether that's a firm we're working with or a person. And so, our core values, first one is "live intentionally." And essentially that means that there is time for what matters most: family, faith, clients, community fun. And we want a firm that knows where we know that they can help us get things done. We want a person that can help us get things done, but there's more to life. So, that had to be there. "Find solutions" is another value. And exploring options with optimism is part of that. So, those criteria. And then the third one of "be real." And "be real" is not just what our culture has become of saying whatever the heck you think you want to say online, it's about forming a relationship with someone, forming trust with them, and then having candid conversations about how to improve processes, how to improve systems, how to do better.

So, Ashley was tasked with finding values alignment, and interviewed some firms and selected one that we think can help us do that.

Michael: So, I'm intrigued by the core values list now. Have we gone through all of them? You said, live intentionally, find solutions, be real.

Zac: Two more: "grow purposefully." And "grow purposefully" is the understanding that I bring this from my faith perspective, but I think it applies even without that, that God is not done with us yet. There's more for all of us in the future. And so, how are we going to grow personally and professionally? And then the fifth one is "live generously." And that's just an acknowledgement that the world is bigger than me individually, it's bigger than us. How are we going to invest our life in it? So, generosity is certainly about giving money, but it's about being kind to people, it's about helping someone in need, it's about being involved in our communities. And I kind of blew through those values pretty quickly, but my guess is most everyone listening has values that they've written down before. At least I would sure hope so.

What we have really focused on is, how do we live those out? How do they become an ethos? How do they become part of what we're doing regularly so that it's not just some words on a wall somewhere, but that they become part of how we operate as a business? And so, we actually don't just talk with people about values, on reviews, we bring up anti-values, like, "Hey, I've heard from you recently a few times that you didn't get this done because you were too busy, or you've got some stuff going on at home, or whatever." And it's not to be mean-spirited, but busy is not an excuse. That's one of our values. And so, how do we need to reprioritize time? How do we need to equip someone, myself included, to stop procrastinating, to get focused on the important things rather than the urgent things? And so, we'll continually reference values and anti values and call those out in a respectful, professional way during private reviews and in team meetings.

Using A Pod Structure To Expand Advisor Capacity [37:42]

Michael: So, how do you think about capacity for these pods? It sounds like you've got a structure you've replicated as the firm has grown, you're adding pods. I think you have a fifth one spinning up now because you have another lead advisor who's still taking on relationships. So, how do you think about capacity for these?

Zac: Yeah. And we have a sixth advisor who will be with us very shortly. He is terminating at his current place now to come join us. And so, we've got a growing team here. We know we need to continue to scale the pods. I question a little bit the industry mantra of like 50 to 100 clients. I really think we have the capacity for each advisor who's equipped with a great planning coordinator and a service coordinator to do an incredibly thorough, deep, thoughtful job for more than 100 people. But we're testing that. Right now, my partner, Corey, and I are way over that. And so, we've been working on a project for the last couple years called Project 100, which is trying to elevate client relationships to other advisors that we can delegate them to.

Michael: Because you want to get yourselves down to 100? Is that it?

Zac: Yes. Because we want to push towards that goal. But I'm not convinced that it has to be 100 because I think there is room to service people well beyond that number, but we'll test it.

Michael: Well, I guess just from a sheer revenue perspective, or if I just think about the math to this, you're a little over $6 million of revenue four/five growing advisors, but the fifth is still taking on capacity. It seems you're already ultimately doing $1.2 million to $1.5 million per team on average by the time the fifth team gets out to capacity.

Zac: Yeah. And as you know, averages can distort things. A lot of that has actually been weighted more heavily towards Corey, who's been fantastic at big relationships and grown a lot, and towards me. And so, we're trying to elevate the other advisors to take on some of that capacity. We've used a Schwab study on compensation as a guideline over time, and they've kind of trended like 350 to 370 of revenue per person.

Michael: Yeah. Revenue per employee.

Zac: Yep. And we've trended higher than that and then kind of grown into it. So, we're at another growth spurt again where we'd like to take on some more. We want to adhere to that first value of "live intentionally." We're not trying to overwork people, we're not trying to overwork ourselves. We want to have balance for time away. Corey's on a sabbatical right now, just like I took one a few years ago. We want there to be vacation time, fun time, balance time, sabbatical time for employees and our team. So, we're going to continue to hire out probably above some of the thresholds that are out there.

Michael: Meaning you may hire more rapidly than one team member every 350 [thousand dollars] of revenue you might pull.

Zac: Well said.

Michael: You might bring it down a little further to have more capacity?

Zac: Yes.

Using Key Questions To Uncover How Clients Want To Live Generously [41:02]

Michael: Okay. So now, take me all the way back to this discussion that we had started down of generosity of the firm. And I was intrigued by what you were describing. You said you have an impact report where you report this out to clients around like how many engaged partnerships you have, some of the asset numbers. I think you said you literally try to measure and report on impact. So, can you explain more? What is that? What are you measuring? What do you think?

Zac: Yeah. If I could, I'm going to rewind a tape even a little further. I'm going to take us way back to a story that's pivotal in my life. You remember that Michael Jordan commercial from the '90s where Mars Blackmon's on there and he is like, "It's got to be the shoes." So, for me, that's a moment. "It's got to be the shoes" was life changing for me. So, I'm a teenager, probably early '90s, and my parents always fostered a great environment for my two brothers and me to be together as a family, and they would cook dinner. And then we were so appreciative that we just came running inside to have that dinner. Well, not really. But we reluctantly came in. We had a great dinner. And I remember this night vividly. And then my mom was like, "Go do the dishes." That was our key to be able to go back to our freedom was we had to clean up the kitchen. And they oftentimes went back to meetings at church or did other things that they had to do.

And in that moment of reluctantly and gripingly helping out with the dishes, I remember turning to my mom and saying, "I need 150 bucks for some new shoes and some shorts for basketball." I didn't know what the family finances were. We always had meals on the table, but I knew there wasn't extra. And so it was a big ask. And it was met with a no, even though she asked some questions about why I needed them, and I didn't have a good answer. I wasn't real pleased that I heard no, so I pushed back a little bit. And she said something that I still remember, she said, "You better get a great job because you really like nice things." And that stuck with me. So, fast forward just a couple weeks from that nighttime of dishes, and I saw something for the first time that I'd seen dozens and dozens of times. And that thing that I saw differently for the first time was my parents putting a check in the offering plate at church. And they did that every week, which I had noticed, but I'd never seen the amount. And I noticed that week the amount was $150 on that check. And here I'm thinking as a selfish teenager, "I can't get my shoes and you're giving 150 bucks a week to the church?"

I had to just sit on that for a while, but they started me on a journey even before that, where when we got an allowance as little kids, I got four quarters, and one of those quarters had to go to church to Sunday school, and one quarter had to be saved, and then I could do whatever I want with the other two quarters. So, there's a biblical principle of tithing, which is giving 10%, and there's some good financial principles of saving 10% or 20%. And they were like, "Forget both those. You've got to do 25% of each." So, that's what I've had wired into my brain all these years. And then I get into college, and I was a broke college kid, except I had this great lawnmowing business that I had built up over time.

And I remember going to my mom one evening and I was very proud because I had just given $1,000 that year towards church and charity, which was 10% of the ten grand I'd made from working. So these little lessons that they had been giving me that I didn't like to hear at the time were sticking. And even though I didn't have a lot of money during college, I was giving. And then I found this career opportunity that became the great job that my mom said I should get, and that was financial advising. And for some weird fortunate reason, when people do this job well, they get paid pretty well. And I've been lucky to experience that. I still like nice things. And so, fast forward now to a more recent time, and I'm meeting with clients in my office who I knew from the golf club and who I knew from church. They lived locally, but they were close to retirement, they'd already bought a vacation home, which for them meant they had two churches. They had two homes, they had two golf clubs. And we're going through all the cash flow modeling. And the husband kind of reports out what he spends on golf clubs. And the wife looks at him with this shocked look. And she said, "Don't you think our giving budget should be as big as our golf budget?" And I was like, "Okay." And what's he going to answer to that one? He had to say yes.

So, that's what goes into the core of our client conversations is, "Man, it's wonderful to have nice things and use your money. If you've earned it and you're fortunate and blessed to have it, go use it and do nice things for yourself, for your family, for others. That's part of being generous. But maybe there's more to it as well. There's some impact in there that you as a person want to have on others, and we want to help you explore and unpack that." And so, that's kind of the full circle to how we got into these generosity conversations with people is just saying, "Attach purpose to that account. What do you want it to do for? You're going to spend it? You're going to save it? You're going to give it? Are you going to spend it now? Are you going to spend it later or never? Are you going to give it now, later, or never." And our company had this cool three-column worksheet that was focused on taxes, but there's a little box that says "Purpose" next to everything. And we just kept asking people questions about purpose, and it kind of snowballed into these future events and conversations that we've woven in.

Michael: So, now share with us more how does this just show up in practice for the firm? I was going to say, just having those conversations. I don't mean to make that sound belittling.

Zac: No.

Michael: Is it about having those conversations or is there other things you're doing and measuring around this that you report out when it comes to generosity?

Zac: It is more. It starts at the core of our advisors feeling confident because they're living it out personally. They're living out generosity personally, which we try to facilitate in a variety of ways internally, but then they're equipped to ask clients questions like a two-year-old would ask, and what's a two-year-old say over and over?

Michael: Why? Why? Why?

Zac: Exactly. So, normally questions get asked like, "What do you give?" And client might say, "1,000 bucks or 10,000 bucks", and it lands there and you jot it down on your fact finder. You put it in the MoneyGuidePro. We're trying to ask why, "Tell me the backstory. Why do you give that? How do you feel about it? How would you feel if you gave more? Is that important to you?" And oftentimes people, they would love to be able to give more, but they don't have the confidence to do more. And that applies to their vacations and helping their kids with a new home or helping grandkids with college, or giving money to their church or some other nonprofit. They want to do more. They just don't have the confidence. So, we're trying to uncover the why, and then we can easily simulate it with a few clicks of a button in MoneyGuidePro and say, "Look, you could double this. You could triple it, and your probability is still at 88%."

Michael: There's a very powerful point to what you just said. To me, a huge part of what we do in the advisory role is clients want to have some combination of confidence and peace of mind that they can do their things, they can achieve their goals. The overwhelming majority of clients freaking out conversations essentially come down to, they're just trying to figure out are they okay? And if you can show them they're okay, then often the situation settles down, because it all comes back to some version of, "I don't know if I'm okay. I don't have confidence that I'm on track with what I'm doing." I know there's something very profound that resonates with me that for some material segment of clients, the phenomenon of, "I don't have confidence" doesn't just show up in, "I'm not sure I can retire," or, "I don't know if I can take that vacation, or do that thing I want to do." That it could also show up as, "I actually would like to give more and be more generous to some of the causes I believe in, but I'm not confident," I guess, "I don't know if I can afford it." It shows up in that vein as well.

Zac: This is not a reflection on me, this is a reflection on our clients, but it is profound. It is deep, and it's why I wrote a book on it last year because people have done cool things with their money, and I think others need to hear that. We've all heard maybe about Warren Buffett's giving pledge, or I hope people have heard about that. He's going to give away 99% of his wealth. But Warren Buffett admits it's really not a big deal. His family's not going to want for money without that 99%. He said that the real generous ones are those who forego maybe going to a movie or they forego a vacation so that they can give to someone in their community or to an organization that's important to them.

And I think there's room for both. So, we help people take little incremental steps along the way, and we help people do really big things. And I want to just share two quick stories around that. So, one is, a client recently, had this conversation within the last two months, and I helped them facilitate a 412% increase in their giving. And I throw out that silly statistic to make it sound impressive, but they were giving... And these are clients that have a net worth of almost $4 million, $3 million of investible net worth. And their charitable giving was $240 a year. They were giving 20 bucks a month to an organization, and they felt good about that. And so, I'm not judging, this is just their backstory and their journey. And I said, "Tell me about why you give to them." And they shared why this organization's important and how they started giving this 20 bucks a month.

And I tried to tell them about QCDs [Qualified Charitable Distributions] and tax savings, and they glossed over, they don't care. And I just explored more, "Well, why do you like to give to them and what's the impact of that?" And they shared a little more. And I said, "Well, how would it make you feel if you could do more?" And he said, "Well, it would be great, but I don't know if we can." And I said, "Well, what if it doesn't have to come from your checking account?" It's like, "Well, how do you do that?" I said, "We'll just send it right out of your IRA as much as you want, and you've got to take $40,000 a year anyway. How much would you like to give?" And he said, "It'd be awesome to do $1,000." So, he went from $240 to $1,000, which maybe to some listening doesn't sound like a big deal, to others it might seem like a huge deal, but to these people, it was very significant.

To me from the outside looking in, there's two huge wins from it. One is we just planted a seed of joy. They experience joy in this and it's going to lead to more because they're going to like that feeling. When they get a thank-you note from that organization, they're going to want to do more. The second thing is, it's a huge ROI for us, and I use not a return on investment, but I call it a return on intentionality. So, these clients are incredibly loyal to us because we help facilitate their paychecks. We help facilitate their giving now, which is four times higher than it was. And we help facilitate giving them confidence to help their daughters with things that they were never doing before. So, it doesn't have to always be big, but yet, there's also really cool big things.

And one of the most enjoyable is my partner Corey had worked with this couple for years, wife passed away in her 70s. They had never shared all of their resources or assets with Corey. They'd only given them kind of part of the picture. And after the wife died, Corey did a really good job of just creating authentic conversations and asking good questions and getting this client to open up about the purpose. And he said, "Well, I guess we'll just leave a little to charity and give some to our family." "Why?" "Well, that's what I do, or that's what I think we should do." So, he just kept asking the questions. And it led to a journey over a couple years where the client made some very intentional, purposeful gifts of good money to go to family, good money assets that would get step up in cost basis and Roth IRAs, and give the toxic tax money of IRAs and deferred annuities to charity and ended up giving like an $8 million estate gift to local charities.

And it would've accidentally happened a little bit to them and a lot of taxes going awry and nieces and nephews getting some money that they didn't even have relationships with this person. And no offense to Corey or to me in the stories, it wasn't because we're great planners, but really just because we could ask questions.

Michael: What are the particular why questions you're opening up with? Because I'm cognizant there's a version of this that comes out wrong and people get really defensive really quickly.

Zac: Yeah. So, the first question that I've found to be very comfortable is, "Tell me who are the people and places that are important to you?" And let them think on a little bit. And obviously they're going to tell you about kids or grandkids if they have them. Great. What are the places/ Why? How'd you become connected with them? What do you do with them? And then the other phrase that I've learned over time is to be curious. And anytime I ask a question that puts people in a yes or no, then they can become defensive or turn off a conversation. But if I'm curious and I just say, "Can you tell me a little bit more about this?" Then it starts to open up. And as soon as those layers of onions get peeled back, if there's not a motive in it or a solution to solve it, if it's just curiosity and conversation, then it goes a long ways.

Michael: So, you said earlier, this culminates in this impact report that you report out.

Zac: Yeah.

Measuring The Charitable Impact Of The Firm And Its Clients [56:40]

Michael: So, now can you help us understand a little bit more. Is there a spreadsheet? What ultimately are you sharing out in this context where like, "I know how to measure assets under management and assets under advisement and number of engaged partnerships." What's the impact side?

Zac: One tool that helps facilitate this next step is, when I did my book, I wanted to highlight some people that had done cool things with giving, but I also wanted to highlight people who were doing other things for themselves or their family. And so, I had a client who literally added a column on her net worth annual statement spreadsheet that she did, and she called it her joy column. And she put things on there, like she just bought a sprinter van to travel the country and do things that brings her joy. She planned other trips, she bought a different house. She knew some of these things would actually decrease her net worth or not be a good "investment" to help her balance sheet grow, but they brought joy in her life. And so, for many clients, and especially for myself, I track cumulative giving on the balance sheet.

Then I start to think, "Well, if I'm tracking it for myself, I'm tracking it for others, why wouldn't we track it as a company?" And so, we started tracking the gifts that we facilitate. So, Michael, if you've already set up and you're giving money 1,000 bucks out of your checking account or your paycheck to someplace every month, we're not counting that 12 grand, that was you. But if we help you facilitate a donor-advised fund that now expands your giving, then we're going to track the 50,000 that went into that donor-advised fund. And if you're a client, like the client that was doing 240 bucks a year and now he's doing $1,000 as a QCD, we're tracking those QCDs. And last year we facilitated over $2 million of client gifts through donor-advised funds and QCDs.

And that starts to kind of put us on a radar in our local community, like, "Wow, these people at IntentGen are facilitating a lot of dollars out to the community." And the ROI within our client base is huge because they come to us and they say, "Help us do these QCDs." And we say, "Why do you want to do them? Do you still like these places? Why are you doing this amount? How would you feel if you did more?" And then that continues to grow. So, that's one thing that we track.

Michael: So, somewhere there's a spreadsheet, a thing in your CRM to literally track and count up donor-advised fund contributions, QCD distributions, the relative change in charitable giving because of the advice process, going from $240, to $1,000, that you track and sum up?

Zac: You got it. And then we also track it through MoneyGuidePro. So, we have our cash flow, we try to simplify. We've got basic living expenses, which are credit cards and cash that they use every month. And then we've got some things that they pay periodically, like paychecks or insurance premiums. And then we've got things that they want to do, which would be travel budgets or charitable budgets. I'm sure most softwares have a function like this, but if you put in a charitable icon in MoneyGuidePro, there's a button that you can say, "Do you want to make it so that taxes don't come into play on that?" So, I can run a MoneyGuidePro for someone and show a $10,000 charitable budget that if they just do it like normal out of their checking account, "Here's their process." If we do creative giving out of donor-advised funds and QCDs and they don't have to factor in taxes on that, then they could give $12,000 a year and have the same net effect. Or they could do $10,000 and they could come out ahead and have a higher probability. Sometimes we, as the advisors get way too technical on tax brackets and itemized deduction. We have to know it, but the client doesn't have to be the expert.

Michael: And then this is part of the metric that you report back out to say, the state of the company, how the firm's doing, like, "We have $500 million of AUM and $895 engaged partnerships and we facilitated $2 million of charitable giving this year."

Zac: Yeah. And if somebody searched our firm online and searched "impact in scale" along with our company name, IntentGen, they would see it pop up in Google.

Michael: Because you literally publish it on your site or something like that?

Zac: Yeah. We want to share it. This should draw in our ideal-fit client who says, "Yes, I want my money to grow, but I want to go on vacations with it." So, we celebrate these once-in-a-lifetime experiences too that we help people facilitate. "I love the concept of a vacation home." How can we help you put that in your plan? I love that you want to pay for your grandkids' education. Instead of 1,000 bucks a year, you can do 10,000 bucks a year for them. So, that's part of what we track. And then the other side is we want to create experiences for people to find the joy of giving who maybe haven't felt it yet. So, we've done a number of iterations of this through the years. You asked a question, how it came about. And there was never a strategy of saying, "If we do this, we'll get more clients." Or, "If we do this, our clients will be more loyal."

I think if I as a person get caught in a quid pro quo of this for that, then I'm missing the whole intent. So, there's a truth that I've uncovered through studying and learning and working with people about generosity. And that truth, again, from a faith perspective is that God wants generosity for us. But there's been scientific studies, way outside the faith community that say our brains are wired for generosity, that people are happier. The president of the college where I went used to always say that people who have charitable gift annuities live longer. I don't know if that's correlation or causation. There's plenty of anecdotes we could look at. So, generous people tend to be happier. I have not ever met a truly generous person who's unhappy.

Hosting Events To Encourage Clients To Give [1:03:17]

Zac: So, I want people to experience that because not everyone was taught like I was by my parents to give a quarter out of the first money they had. So, we tried to create experiences for it. And one of the things that we did long ago is we just invited nonprofits to a big gathering and we had our clients come. This was maybe 15 years ago. And we had some appetizers and some food and some giveaways, and that started a process that's evolved. During COVID, we couldn't do that. So, we did an online campaign, we called it Compassion Counts. And there was a book I read called "Natural Born Heroes," which is one of my favorite books ever, cool blend of history and health motivation and just life motivation.

But the quote, to paraphrase, was something like, "A true hero shows that through compassion, not through bravery or strength." And we said, "Okay, it's a time when the world needs compassion during COVID. We're all stuck at home. How can we rally together?" And we just asked our clients to give money to local organizations that needed it at the time. And we as a company matched that. And lo and behold, like in this, Created It Quickly campaign, we raised 80 grand. And then when we could get everyone back together after COVID, we started growing the impact of this. And this year, we'll have an event that will be completed by the time our podcast goes live. But we have 20 local nonprofits coming. They're going to invite people from the community who they think will donate to their nonprofit. We're going to match it and we're going to do it with a fun wrinkle that says, "When our clients and community members learn about these charities, they'll get a raffle ticket and they can win raffle prizes."

If they learn enough that they're compelled to give and they give to that charity at that night, they'll get casino chips. And then we have a casino gaming group hired to have people play table games and have cocktails and have a great night having fun. If they win money at the table, then if they're one of the biggest winners, they'll get to direct money that we're going to give to charities. And if they lose, we hope they'll give more money and get more chips and keep playing. And so, our company will pay for all that. It'll be an expensive night, but it'll be a huge community event, probably 300 to 400 people. And we'll likely raise 150 grand for these organizations. But more importantly than the money, our client base gets to engage with organizations who are doing cool things. So, our client base, pre-retirement, retirement, who are looking for ways to engage as they retire and find purpose are going to find organizations that they're like, "Oh yeah, I love your mission. I'm going to come volunteer sometime there." So, it's a win-win in a lot of ways.

Michael: So, I just want to make sure I understand the flow in who gets invited. So, part of what I heard there, I guess, and my business development antenna like goes off, you're inviting clients, but they're inviting their donors as well because you're going to match their donors.

Zac: Yeah. So, we're inviting our clients who we think will have a good time and want to give money to these places and learn about them. We're inviting the organization so they get exposed. But this is the business development. We're saying, "Bring your key board members, bring your key donors who will donate." And we even said in the invitation, "Who you think might want to learn about IntentGen." So, we're bold. We want more people to help them be thoughtful and accountable and intentional and generous with their money because it's going to be more impact for the community. So, we try not to hide that, but it will be a very soft event in the extent that we're not given a speech about the technical things that we do and asking people to meet with us. We're just showing them who we are.

Michael: Okay. And I guess I've got to ask, because it sounds like you've been doing these for a while. As you said earlier, you don't do it for the quid pro quo of, "We're going to do the things to get the clients to grow the business." But is it showing up that way? Is it actually driving outcomes?

Zac: Yeah. It drives outcomes in terms of new people that want to come learn about, "What is this planning that you're doing? How can you help me be more generous?" So, it definitely has that return. But the client satisfaction, client loyalty is off the charts. People want to be connected to it. They want to be part of something bigger than themself, and we're creating experiences for that. So, another fun one we did, I like to bike ride. And seven years ago, I started, for my 40th, an event that I never knew how it would turn out, but I asked some of my college buddies, high school, work friends, etc., people from different chapters in my life. I said, "Come do this crazy ride with me in Iowa. It's called RAGBRAI. And you ride your bike across the state of Iowa for a week," and it's like a big grueling physical challenge, but also a party. And then I added a charity layer onto it. I said, "I'm going to hire my brother and rent an RV. We'll cover the week, you raise money from people and donate."

And we raised like 25 grand for a children's development place that was in my hometown where the ride finished. So, that was cool. But then lo and behold, some of us actually decided we liked biking. So, we've done these Century Rides in different states every year. And when I told people about that, the number one thing I heard from others is, "Well, that sounds amazing, but I could never do that." And I just don't believe that for a second. I have a lot of confidence in people that they can do more things and we all sell ourselves short. So, I created a ride two years ago called the Solstice Century, and our company generously supported me on this crazy idea, a lot of time investment, a lot of money investment. But we created a concept where people could sign up and ride 100 miles and we'll cover everything for the day, but we ask each rider to raise at least $1,000 for the local charities that we're going to choose.

And we set up the online fundraising and all that. And the first year we had 38 riders and we raised 100 grand. And there were two cool parts about that. A, the money was great, that's what we wanted. But there were like 19 people that year who did a Century Ride for the first time who never thought they could do it. And then this year, we grew it to 52. And I'm hoping next year, we cap it at 100, which I think is about all we can handle. But I'm pretty convinced that people can do more physically and we don't allow ourselves that confidence. And I know people can do more charitably. And I had grown adults crying to me this year, not just from the physical pain, but from the significance of being part of such a big charitable impact, and then also the physical impact of doing something that's really hard and saying, "Wow, I didn't know I could do that, and I did."

Michael: I'm struck just as you've been describing it, all of this it sounds like is very local community based for you. It's local nonprofits. Does that also mean you're very heavily local clients as well? This is like in the community, back to the community?

Zac: Good insight. We are heavily local, but we have clients in 20 states. We have engaged partners all around the country who most of them have started here. Some we've been referred to, but most have started here and they've moved away. And so, we do struggle with how to keep them engaged. Some of the things we've done have been virtual and they can be part of it. I think we're going to do, for this Casino for a Cause, some virtual things to try to engage people who are far away. And then others we've done to just say, "How can we help you impact your community where you are, even though we're not there? And support it that way. So, maybe it's sponsoring an event in their area.

We have a large budget, outside of traditional things that all advisories firms spend their money on, I think probably our two highest line items would be generosity-type events, just sponsoring different things. Very little ROI on that, but just part of who we are. And then the second is coaching. And we consistently spend 1% to 2% of revenue on that. And that's a huge ROI, that's almost immeasurable.

Michael: Wait, on coaching—

Zac: Us getting good coaches to coach us. So, speaking coaches, Strategic Coach, EOS, different groups we've engaged over time.

Michael: And then all of the giving of the events rolls back into the annual impact number of $2 million this year, and hopefully continue to grow.

Zac: Yeah, thanks for checking on that. That's actually a second number that we report. So, that's a separate item.

Michael: But you do that separate. So, what's that line item? How do you report back?

Zac: We'll be at about $300 [thousand] this year between these... This year we're going to have two big events. So, I think last year it was $140 [thousand]. So, we celebrate the group commitment to say that we facilitated an event that did this.

Michael: And what's the actual, I don't know, report out to the world? You write like a blog post? Do you do like a state-of-the-company presentation? When you said this is Googleable, I guess we can put a link in the show notes, but what are you doing with this?

Zac: Well, it's on our website. For the past five years that we've done, it was just a simple PDF. And then this year I said to our marketing coordinator and the firm we work with, I was like, "Can we do something that's cooler?" And they came up with, it's basically like video, PowerPoint slide, but I think it's well done. It's on YouTube and it's just called Impact and Scale 2024 Reflections. And it's just a little collage of all the things that we've talked about.

Michael: Oh, very cool. All right. We'll put a link out too for the show notes for folks who are interested. So, this is episode 461. So, if you go to kitcess.com/461, we'll have links out to the Impact and Scale video if you want to see how this shows up.

What Surprised Zac The Most Building His Advisory Business [1:14:22]

Michael: So, Zac, has you now gone down this journey, and as you said, you're 20-plus years in starting at the peak of the tech bubble, what surprised you the most on this journey of building an advisory business?

Zac: Well, I don't know if it's a surprise but it just I continually experience it. So, maybe it is a surprise, but people have a strong desire to do more and they often lack the confidence to do it. And so, to me, our business now is much less about telling people to save more money, it's about showing them the trajectory that they're on and letting them make an intentional choice. We just had a younger family this week that I prepped with another advisor. They're way off track. And I'm not going to sit there and tell them, "You have to save." We're going to say, "Here's the path that you're on. If you want intentionally keep spending money and having these experiences and scale back later, go right ahead. That's the path you're on. If you want more later, if you want your future self to be more flexible and have more opportunity, then we've got to make some changes now."

That's one that we probably as advisors run into more frequently, but there's a lot of people. And our ideal client kind of fits now into this niche of what we refer to as the millionaire next door. There's a great book that I reread as I worked on mine last year. I love the principles and the concepts, but those millionaires next door embody some characteristics. They care about their family, they care about their community. They've been frugal, they've been disciplined investors, and they end up probably with more money than they need. And what a cool responsibility and opportunity to help them learn to articulate what it is they want to accomplish with that.

Michael: Because sometimes they lack confidence to do more.

Zac: Yeah. And sometimes they've lacked even inspiration to do more. They just know what they know. So, client events aren't always around generosity. We've had travel planners come in and our clients get chattering about different trips they've had and they get exposed to new ideas and they're like, "Wow, we could go spend some money." So, that's one of the surprises is that as an advisor, because I understand money and I've always been blessed or cursed with understanding it and liking it, it comes easy to me, but it doesn't for most people. The other thing is, I've been surprised as we've built our company…I don't want to pretend that we have it all figured out because we don't. We struggle with personalities. We've got a great leadership team. It's myself, my partner, Corey, our COO, Ashley, and then our third partner, Jacob, who's been with us for almost 20 years, but became a partner about two years ago.

And we struggle all the time. We're learning as we go, but I figured out a little bit that people care more about purpose than they do a lot of other things. They want to have meaningful work. And yes, we all want to get paid well, but they just want to know there's a pathway to something more, whether it's responsibility, opportunity, compensation. So, we've tried to really focus on creating a place where the people who work for us and the people who engage with us for planning get to talk about purpose a lot. And I guess it's kind of surprised me how much that resonates with people is like, "Wow, that matters."

The Low Point On Zac's Journey [1:18:15]

Michael: So, what was the low point on this journey for you?

Zac: There's a few of them. Several I remember distinctly well, early on, I think activity always will be king in this world. You just have to see a bunch of people and keep forming relationships and take care of them. But as a newer advisor, I had 31 appointments scheduled over a two-week period. I was crushing it on activity. And 16 of those canceled over that two-week period. So, just deflating. And I had this cycle happening early on and I got to a point about eight months in where my draw that I got early on was done. I had set aside money for taxes, I had to borrow against my tax money, and I was broke. And I went on an appointment with Corey, who's now my partner. At the time, he was just another advisor that I did joint work with.

And he was so good on that case. And clients trusted us and were confident in what we were doing. They rolled over money, they started some insurance, and I still work with those clients today. But that was a tipping point for me. I was on the verge of not making it and it put me out back on the path. So, that was a low point.

As we evolved, COVID was a low point for me. So, we've built up this team, we're flying high, we have great momentum, and then we hit the skids. And like everybody, we had to redirect and figure out how to run a company from home and how to take care of clients when they were stressed. And I talked to a lot of people that COVID was one of the best periods of their life where they got to stay home and be with the people they cared about the most. But I'm in a family of six, my wife and I have four boys, and they were all 9 to 13 at the time. It was brutal.

Michael: And they're mostly stuck home and can't go out.

Zac: They were all at home. Their sports were done. They couldn't see their friends. The only reason we survived, I think, is because we had a trampoline out back and we all spent a lot of time on that. But life was hard for me because we're taking care of people's professional financial anxieties. It was nonstop work for me. Everybody else was on vacation at home and going nuts. And it drove me down a spiral where I kept taking on the weight of other people's challenges and stresses and anxieties and trying to do planning for them. And I went down into a dark hole and really struggled with depression for a while and my mental health coming out of that. I was fortunate that through people I knew in the community, I could get care. I had the financial ability to pay for it, and have been on a pathway towards better health. But not everybody gets that.

And so, that low point for me has opened up a new chapter where I'm really focused with some mental health organizations to say, "How do we expand access and awareness about this so that people can get care when they need it?" Because there is a path forward, but not everybody knows how to find that path or what to do when they get there. So, we made some cool business changes coming out of that too. That's part of where our live intentionally value came into focus. And we said, "How can we set some better barriers?" We've used Free Focus, Buffer Day strategies from Strategic Coach for a long time. We went back to that and I said, "I want to take it to the next level." I had thought about a sabbatical for years, and Corey was fully supportive.

Ashley had gone on a maternity leave and she was so critical to everything and how our company worked. And then she disappeared for three months, and we kept moving along. And I was like, "Ashley, if you could do that for yourself, can you do that for me?" So, she helped plan out a sabbatical where I could step back from things. And I was gone for two months and totally disconnected from work. And it was such a great thing, not only for me personally, but for our company who all of a sudden people had to step up, make decisions themselves. They had to do things without asking. They had to just grow in responsibility. So, I look at every low point that's come and I can see goodness in them now, but man, they're tough when you're in them.

Zac's Advice For His Younger Self And For Newer Advisors [1:22:43]

Michael: So, what else do you know now you wish you could go back and tell you from ten, 20 years ago in following this path of growth with the firm?

Zac: I wish I knew that I could just move on to the next client more easily. So, I've coached all our boys in basketball for like 31 teams over the last 15 years. That's been a passion of mine. And my mantra was always next play, "Quit worrying about the mistake you just made. Quit worrying about the bad play. Quit worrying about whatever. Just move on to the next play." And as an advisor, so many times I was chasing down a client who didn't want to work with me, because I saw something there on how I could fix it or how I could help him, or I saw a commission or I saw an opportunity and I would chase and chase. And, Michael, there's so many good people out there in this world. Now, I just want to attract good people to us and I want to work with them. And if they don't love what we're doing, then let's professionally part on good terms and move on. I wish I had a better handle on that early on.

Michael: Could you have done it differently early on? Or did the business have to get to a certain financial stage to be comfortable and able to do that?

Zac: It's a good question, because I know people put minimums out there that you have to have this. That's hard when you're new especially, we don't even do it now. But I think I could have because I could have invested in different ways in the people who already liked me. And we've done, I think, a decent job of creating a referral culture over time. But there were people already when I was brand new that wanted to help me, and I didn't spend enough time with them because I was chasing somebody who didn't even want to work with me. And so, I think, yeah, to some extent, you just got to find the next client when you're beginning, but also if you can do better with the people you have and they want to help you, and you can find ways to network through all the channels that are there now, I'm convinced there's better ways to spend our time than chasing people who don't want our help.

Michael: So, any other advice you would give younger, newer advisors as they're coming into the profession today and trying to get started?

Zac: Yeah. I think, find their purpose. So, I had a calling from the start to do this. This is kind of weird, but I wrote a term paper and I pulled it out when I was prepping for this interview. And I'll read just a very brief part of it, but I said, "The sole purpose of my business is to help individuals and families improve their financial situation. What separates me from other professionals is the fact that I understand that having a better financial situation does not only mean making more money, paying fewer taxes, obtaining more stuff, and accumulating greater wealth, but can also mean giving away more money, working less, or helping others." So, I was a novice 22-year-old who knew nothing and I was writing a term paper, but I already knew that's what I wanted.

And so, for me, and for us as we've built our company, it's always been about what's the purpose of the money? And that's not the mission for every advisor. Somebody out there is going to be like, "I'm the best person at alternative investments," or, "I'm the best person at…" fill in the blank. But find what your purpose is and then go do that really well.

What Success Means To Zac [1:26:40]

Michael: So, as we come to the end here, this is a podcast about success and just one of the themes that comes up is that word success means very different things to different people. Sometimes it changes for us through stages, seasons of life. So, you're on this wonderfully successful path with the business as you're crossing $800 million under advisement and 16 team members and $6 million of revenue. The business seems to be in a wonderful place. So, how do you define success for yourself at this point?

Zac: I go right back to the name of our company because it's not just marketing. I want to live intentionally and generously. I want to be a grandparent who's engaged in the lives of my grandkids. And that means I can't be working 40 hours a week at that time. I want to be a dad who's engaged in the lives of my teenage boys and college age and young adult kids. So, I want to keep elevating all the other people in our company to do more so that I can have the balance to do the personal things that are important to me. And then generosity is a piece of it. I've had this goal in my mind for a long time, because I heard it probably 15 years ago from a speaker who said they gave away all of the money that they made that year.

And I said that to my wife once and she's like, "You're fricking crazy." And I said, "Well, it comes with something implied. If you're even crazy enough to think that way, you probably have some base of assets that you can live on." So, Kristen and I keep progressing on that journey to say, "Instead of always raising our lifestyle as we make more, how do we grow the impact of what we're doing?" Something I put on my balance sheet that I track every year on our net worth statement is our lifetime-giving goal. And I'd love to see our lifetime cumulative giving be higher than our net worth, which is a tough challenge because I plan on always growing the net worth too.

Michael: Yeah. Relative growth rates with compounding. You can get a crossover eventually.

Zac: Right.

Michael: Well, very cool. Very cool. Thank you, Zac, for joining us on the "Financial Advisor Success" Podcast.

Zac: Thanks for having me. And I hope it encourages people to find a little purpose and find a little more confidence for them and the people they work with.